CATL and BYD, China’s two auto battery giants, are expected to compete head-on in Japan, in a scramble for the market’s handsome potential.

According to a report from Nikkei News, CATL will roll out residential and industrial storage batteries in Japan that costs only half of its rivals’ products in 2020, while BYD will begin shipping solid state batteries in 2021.

Both CATL and BYD have expressed strong interest in the Japanese market. In June, Toyota officially announced that it would be collaborating with CATL and BYD in the production and development of auto batteries. In February, Honda also officially inked a contract with CATL for the supply of such batteries.

China is known to be a very dominant supplier of batteries on the global battery market. As of this year, its global share has already reached 70%, while its share in Japan has topped 50%.

The two battery giants from China are currently expected to face strong competition from companies like Panasonic, which ranked in 2nd place in the Japanese auto battery market in 2018, between CATL and BYD.

“The timing for CATL and BYD to step up inroads into the Japanese market is good, given the growing popularity of new-energy cars there,” remarked Zhao Xiaoguang, an auto-industry analyst.

With the recent advances in technology, a growing number of the industry’s automakers have already begun to speed up the development of their electric cars. This includes manufacturers like Toyota which is currently planning on raising the output of its electric cars to 1 million units by 2025.